SingPost’s net profit plummets by 23% to $35.9m in 1Q17

Skyrocketing expenses are to blame.

The Postman was stunned by the rising expenses for the period as it saw its bottomline drop by 11.2$ to $35.8m, despite its revenue rising by 30.9% to $333.3m.

According to a report by OCBC, the expenses were a result of of investments in business transformation loss of rental income from redevelopment of SPC Retail mall (due for completion mid 2017), depreciation charges incurred on the Regional eCommerce Logistics Hub (obtained TOP in Apr 2016), and investments in eCommerce IT and operational capabilities.

Meanwhile, a bulk of the group’s operating profit still came from postal, at $42.1m, as the strong growth in international mail volumes from eCommerce-related activities helped offset the effects of lower domestic letter mail volumes as well as the deconsolidation of subsidiaries divested last year.

“For the logistics segment, operating profit rose 5.7% YoY to S$7.2m, while the eCommerce division saw operating loss of S$3.5m in 1QFY17 compared to –S$1.9m in 1QFY16 due to continued investments in the segment,” the report said,” the report added.